Slide 1: 2019 ASX Limited Half-Year Results Presentation
For personal use only 2019 ASX Limited Half-Year Results Presentation 14 February 2019
Slide 2: Agenda
Agenda For personal use only 1H19 overview Dominic Stevens – CEO Strategic update Dominic Stevens Business performance Peter Hiom – Deputy CEO Summary and outlook Dominic Stevens Q&A – analysts followed by media Dominic Stevens, Peter Hiom and Gillian Larkins – CFO 2 |
Slide 3: 1H19 highlights
1H19 highlights For personal use only Increased returns to shareholders • 6th consecutive first-half increases in NPAT and DPS • Solid growth in all businesses driven by market activity and initiatives Stronger Foundations resources in place • Enhanced enterprise risk management practices and polici
Slide 4: 1H19 financial results
1H19 financial results Strong result delivering increased returns to shareholders For personal use only • $424.7 million, up 3.8% on a statutory basis Revenue +$26.0m • Up 6.5% on a like-for-like accounting basis • Strong overall performance across all businesses • $105.2 million, up 9.4% Expenses (
Slide 5: Revenue drivers
Revenue drivers Solid growth in market activity across all businesses Revenue movement ($million) For personal use only Revenue $424.7 million, up 6.5% • Listings and Issuer Services up 8.0% 4.8% – Increased listed entities and market capitalisation 8.6% (2.5) 2.5 – Total capital raised up 38% to $6
Slide 6: Operating expenses
Operating expenses Investment in core services and new initiatives Expense movement ($million) For personal use only Operating expenses $105.2 million, up 9.4% • Expense composition: – Normal CPI growth, approx. 3% 1.5 0.5 0.3 – Growth initiatives, approx. 2% 6.7 • Data analytics platform • Other DL
Slide 7: Capital expenditure
Capital expenditure Investment in key platforms and services For personal use only Capital expenditure ($million) • Capital expenditure $27.6 million – Ongoing investment in upgrading technology to 54.1 support both BAU and growth opportunities, 50.2 50.3 including 44.4 • CHESS replacement and relat
Slide 8: Strategic update
For personal use only Dominic Stevens – CEO Strategic update - Customer focused, technology driven
Slide 9: Multi-layered growth strategy
Multi-layered growth strategy Customer focused, technology driven For personal use only Revenue streams in analytics, DLT, Addressing customer challenges through ASX’s new services and AI Emerging expertise, independence and infrastructure strategic growth opportunities Leveraging core operations to
Slide 10: More contemporary, flexible and resilient ASX operating platform
More contemporary, flexible and resilient ASX operating platform Stronger Foundations resources in place For personal use only CLEARING RISK ENTERPRISE RISK MARKET TECHNOLOGY and TECHNOLOGY OVERSIGHT INFRASTRUCTURE Market-leading call frequency margin New risk, technology and operations Restruc
Slide 11: Enhancing ASX's core customer value proposition
Enhancing ASX’s core customer value proposition A history of making the financial services industry more efficient For personal use only The evolution of trading and data services ALC Chalk Electronic Co-location for low Data centre Cross-connections Global connectivity boards trading latency connec
Slide 12: Enhancing ASX's core customer value proposition: DLT-based CHESS
Enhancing ASX’s core customer value proposition DLT-based CHESS will unlock efficiencies for customers and the financial services industry For personal use only Real-time data Verifiable, source-of-truth data DLT-based CHESS Secure, permissioned access Ability to cross-connect with one another 12 |
Slide 13: Pursuing new revenue streams
Pursuing new revenue streams Leveraging ASX’s optionality to deliver new opportunities for customers For personal use only ASX OPTIONALITY CUSTOMER CHALLENGE ASX SOLUTION CUSTOMER BENEFITS Expertise, independence and infrastructure How to grow OPEN Reduce costs, save earnings and INFRASTRUCTURE time
Slide 14: Pursuing new revenue streams: ASX's data platform
Pursuing new revenue streams ASX’s data platform For personal use only ASX OPTIONALITY CUSTOMER CHALLENGE ASX SOLUTION CUSTOMER BENEFITS ASX data and connectivity Expertise operating Data and analytical ASX DATA Access, solutions, regulated markets and availability PLATFORM distribution managing con
Slide 15: Pursuing new revenue streams: Other DLT opportunities
Pursuing new revenue streams Other DLT opportunities For personal use only ASX OPTIONALITY CUSTOMER CHALLENGE ASX SOLUTION CUSTOMER BENEFITS The distributed ledger technology, expertise and infrastructure being built for CHESS replacement Costs and DLT Productivity benefits Experience as independent
Slide 16: Pursuing new revenue streams: Sympli e-conveyancing joint-venture
Pursuing new revenue streams Sympli e-conveyancing joint-venture For personal use only ASX OPTIONALITY CUSTOMER CHALLENGE ASX SOLUTION CUSTOMER BENEFITS Experience in financial settlement and UX governance Existing property financial User experience SYMPLI Productivity settlement infrastructure and
Slide 17: Business performance
For personal use only Peter Hiom – Deputy CEO Business performance
Slide 18: Listings and Issuer Services
Listings and Issuer Services 26% Solid capital raisings and market activity 1H19 1H18 Var Var % For personal use only Revenue ($million) 111.5 103.2 8.3 8.0% Total capital raised ($billion) Listings 85.0 78.3 6.7 8.6% Issuer services 26.5 24.9 1.6 6.3% 60 Key drivers 40 New listings (number) 72 77 (
Slide 19: Listings and Issuer Services
Listings and Issuer Services Growth in key initiatives, with increased market capitalisation Foreign listings distribution For personal use only Further growth in strategic sectors • 10 new technology listings¹ in 1H19, 6 of which were foreign • 17 foreign listings¹ in 1H19 - 286 entities listed at
Slide 20: Derivatives and OTC Markets
Derivatives and OTC Markets Increased futures activity with market volatility 1H19 1H18 Var Var % 35% For personal use only Revenue ($million) 146.8 138.1 8.7 6.3% Futures contracts (million) Futures and OTC 109.3 101.6 7.7 7.6% Equity options 10.2 10.9 (0.7) (6.4%) CAGR Austraclear 27.3 25.6 1.7 6.
Slide 21: Derivatives and OTC Markets
Derivatives and OTC Markets Global distribution and continued momentum in key investments OTC notional value cleared ($billion) Futures For personal use only • Growth in 10 year bond contracts up 3.5 million, 16.1% on pcp 3,177 • Increase in offshore futures trading with addition of new firms 3,006
Slide 22: Trading Services
Trading Services High market activity and continued growth in ecosystem 26% 1H19 1H18 Var Var % For personal use only Revenue ($million) 113.5 104.5 9.0 8.6% ASX on-market value traded ($billion) and Cash market trading 26.0 22.6 3.4 15.2% average trading fee per side per $ value (bps) 800 0.20 Info
Slide 23: Trading Services
Trading Services Continued focus on expansion of ecosystem and delivering ASX data platform Cash market trading Information services revenue ($million) For personal use only • On-market trading market share 88.7% (85.9% pcp) 8.1 • Auctions 27.5% of ASX on-market value traded (24.0% pcp) as 4.6 custo
Slide 24: Equity Post-Trade Services
Equity Post-Trade Services 13% Higher cash market and settlement activity 1H19 1H18 Var Var % For personal use only Revenue ($million) 54.7 52.2 2.5 4.8% On-market value cleared ($billion) Cash market clearing 27.3 25.9 1.4 5.7% Cash market settlement 27.4 26.3 1.1 3.8% Key drivers 557 581 576 On-ma
Slide 25: Equity Post-Trade Services: CHESS replacement on track
Equity Post-Trade Services CHESS replacement on track For personal use only Build progressing Stakeholder engagement continues • Confirmed Day 1 scope • 4 x ISO 20022 Technical Committee meetings • Go-live revised to March/April 2021 following market feedback • 3 x Business Committee meetings • Rele
Slide 26: Interest and dividend income
Interest and dividend income Growth in collateral balances and elevated short-term rates led to an increase in interest For personal use only $million 1H19 1H18 Var Var % ASX Group net interest income 10.9 8.7 2.2 26.3% Interest and dividend income ($million) 60 Net interest on collateral balances 3
Slide 27: Summary and outlook
For personal use only Dominic Stevens – CEO Summary and outlook
Slide 28: Summary and outlook
Summary and outlook For personal use only • Strong result amid market volatility • Delivered increased returns to shareholders with interim dividend up 6.7% to 114.4cps • On track to implement Stronger Foundations initiatives by end of FY19 • Focused on growth projects that leverage our expertise, i
Slide 29: Q&A
For personal use only Q&A
Slide 30: Appendices
Appendices For personal use only 1. Income statement (prior periods restated) 2. Income statement (as previously reported for prior periods) 3. Balance sheet 4. Key financial ratios 5. Transaction and activity levels 6. Free cash flow summary 30 |
Slide 31: AASB – Revenue from Contracts with Customers
1. AASB 15 – Revenue from Contracts with Customers 1H18 Revenue (as per AASB 15 Restated revenue $million statutory reporting) deferral adjustment (revised for AASB 15) For personal use only Annual listing 42.6 - 42.6 New accounting standard AASB 15 Revenue from Contracts Initial listing 9.4 (0.9) 8
Slide 32: Income statement (prior periods restated)
1. Income statement (prior periods restated*) 1H17 2H17 1H18 2H18 1H19 $million $million $million $million $million For personal use only Annual listing 39.3 40.0 42.6 43.2 46.6 Initial listing 7.4 7.8 8.5 8.8 9.6 Subsequent raisings 21.9 22.3 23.2 25.2 25.1 Other listing 5.0 3.5 4.0 4.1 3.7 Listing
Slide 33: Income statement (as previously reported for prior periods)
2. Income statement (as previously reported for prior periods) Pre-AASB 15 AASB 15 1H17 2H17 1H18 2H18 1H19 For personal use only $million $million $million $million $million Annual listing 39.3 40.0 42.6 43.2 46.6 Initial listing 9.7 6.3 9.4 9.2 9.6 Subsequent raisings 26.7 19.8 32.6 26.3 25.1 Othe
Slide 34: Income statement (as previously reported for prior periods)
2. Income statement (as previously reported for prior periods) Pre-AASB 15 AASB 15 1H17 2H17 1H18 2H18 1H19 For personal use only $million $million $million $million $million Staff 55.2 55.4 56.5 58.1 63.2 Occupancy 7.3 7.3 8.1 8.3 8.6 Equipment 14.6 13.3 13.8 14.1 15.3 Administration 8.1 10.1 10.4
Slide 35: Balance sheet
3. Balance sheet Pre-AASB 15 AASB 15 31 Dec 16 30 Jun 17 31 Dec 17 30 Jun 18 31 Dec 18 For personal use only $million $million $million $million $million Assets Cash and available-for-sale financial assets 7,002.2 9,085.6 8,636.2 9,565.3 8,688.3 Intangibles (excluding software) 2,317.6 2,326.6 2,326
Slide 36: Key financial ratios
4. Key financial ratios Pre-AASB 15 AASB 15 1H17 2H17 1H18 2H18 1H19 For personal use only Basic earnings per share (EPS) 1 113.4c 111.0c 119.1c 110.9c 127.1c Diluted EPS 1 113.4c 111.0c 119.1c 110.9c 127.1c Underlying EPS 2 113.4c 111.0c 119.1c 121.3c 127.1c Dividend per share – interim 102.0c - 10
Slide 37: Listings and Issuer Services
5.1 Listings and Issuer Services 1H17 2H17 1H18 2H18 1H19 For personal use only Total domestic market capitalisation ($bn) – period end $1,760 $1,777 $1,932 $1,957 $1,790 Total number of listed entities (includes all stapled entities) – period end 2,215 2,239 2,275 2,285 2,284 Number of new listings
Slide 38: Derivatives and OTC Markets: equity options
5.2 Derivatives and OTC Markets: equity options 1H17 2H17 1H18 2H18 1H19 For personal use only Trading days 129 124 128 124 129 Single stock options (‘000) 45,241 48,054 41,768 38,323 36,636 Index options and futures (‘000) 5,580 4,808 5,932 6,529 6,196 Average daily single stock options contracts 3
Slide 39: Derivatives and OTC Markets: futures and OTC
5.2 Derivatives and OTC Markets: futures and OTC 1H17 2H17 1H18 2H18 1H19 For personal use only Trading days 129 127 128 127 129 Total contracts traded – futures ('000) ASX SPI 200 6,040 6,215 6,253 7,529 7,974 90 day bank bills 14,061 14,870 15,456 17,770 15,083 3 year bonds 25,431 27,802 28,127 27
Slide 40: Derivatives and OTC Markets: futures and OTC (continued)
5.2 Derivatives and OTC Markets: futures and OTC (continued) 1H17 2H17 1H18 2H18 1H19 For personal use only Total contracts traded – options on futures ('000) ASX SPI 200 120 82 77 63 66 3 year bonds 119 33 51 34 91 Overnight 3 year bonds 194 284 158 156 131 Intra-day 3 year bonds 250 210 207 137 20
Slide 41: Derivatives and OTC Markets: Austraclear
5.2 Derivatives and OTC Markets: Austraclear 1H17 2H17 1H18 2H18 1H19 For personal use only Settlement days 129 124 128 124 129 Transactions ('000) Cash transfers 293 290 298 308 311 Fixed interest securities 367 374 383 387 397 Discount securities 74 72 72 74 75 Foreign exchange 4 5 5 4 5 Total tra
Slide 42: Trading Services – cash market trading
5.3 Trading Services – cash market trading 1H17 2H17 1H18 2H18 1H19 For personal use only Trading days 129 124 128 124 129 Total cash market trades ('000) 130,984 135,449 144,880 147,648 171,273 Average daily cash market trades 1,015,381 1,092,332 1,131,875 1,190,711 1,327,701 Continuous trading val
Slide 43: Trading Services – technical services
5.3 Trading Services – technical services 1111 1H17 2H17 1H18 2H18 1H19 For personal use only Technical services (number at period end) ASX distribution platform Australian Liquidity Centre cabinets 270 285 298 301 310 Other data centre cabinets 11 13 13 13 13 Connection services ASX Net connections
Slide 44: CCP participant collateral balances
5.4 CCP participant collateral balances 1H17 2H17 1H18 2H18 1H19 For personal use only $million $million $million $million $million Balances at period end ASX Clear – initial margins 445.5 672.3 441.9 567.3 654.8 ASX Clear (Futures) – initial margins House1 1,425.8 2,030.9 1,822.5 1,920.6 1,743.3 AS
Slide 45: Free cash flow summary
6. Free cash flow summary 1H17 2H17 1H18 2H18 1H19 $million $million $million $million $million For personal use only ASX Group cash Total cash and short-term investments 7,002.2 9,085.6 8,336.2 9,565.3 8,688.3 Less participants’ margins and commitments (5,987.7) (8,084.7) (7,251.7) (8,495.8) (7,548
Slide 46: Disclaimer
Disclaimer The material contained in this document is a presentation of general information about the ASX Group’s activities current as at the date of this presentation (14 February For personal use only 2019). It is provided in summary and does not purport to be complete. You should not rely upon i